Isn't there an issue with having long term contractors (individuals, not firms). I seem to remember that Microsoft was found to have almost double the full time staff, if you counted the contractors that had worked for them for years.

Bob/Cuffed:

Not as good, but perhaps less disruptive, is to develop some formal credentials in more "modern" activities, such as (in perhaps declining persuasiveness) certifications received, courses completed, books read, organizations actively joined, et al. You might also try "informal engagements," such as help with a favorite nonprofit or religious organization, such as setting up a web site, a database, a set of macros, etc. The same advice about building your resume while out of work can also apply when at work, but in a "less relevant" position. Create "evidence" that you have acquired modern skills.

Been there, done that

An additional option, depending on what "Cuffed" wants to do, is volunteering for an organization that needs what he WANTS to do, but can't afford it. He can build an app in his donation time, help out a worthy non-profit, and have a very good resume line.
The time commitment is much more flexible since they aren't paying for it (although experience tells me that there will STILL be demands that seem unreasonable...such is the nature of clients).

Good points. But, I'm surprised that you overlooked one other thing. His cobol skills may be "arcane", but clients contact and analysis are NOT arcane. And, even development, properly presented is not all that arcane. Coding is specific to one language. But, no matter what language you are using, issues like user interface, interface with other systems, data flow and access, and translation of user needs to concrete feature sets, share many characteristics across the board.

Isn't there any other language used there
besides COBOL?
I'm thinking SAS. Even if you are not
assigned to do anything with it, if it
is present and installed, you can get
practice with it.

If they don't have it, you can purchase
SAS Learning Edition to install at home.
You do have a PC at home, don't you? At
least to maintain your checkbook...

SAS is available on multiple platforms:
mainframe, Unix, PC. If you learn SAS,
you are not limited to any single platform,
you are not a dinosaur.

(I don't work for SAS.)

I started using SAS as a skeptic, about
two decades ago, in response to a zealot.
As I got more-familiar with it, it became
the first tool that I reached for to write
something quickly.

Here's another strategy. Try putting a modern twist on those old COBOL systems.

For instance, in this company there may be decision-makers who would like to see a Web interface to those systems. You could try a replication architecture for business analysis systems. There's also no inherent reason COBOL couldn't support an SOA/ESB architecture.

Years ago, I was working in a "legacy" language, but I was reading and very interested in modern interface designs. I fused the two and developed a system that used a non-modal interface in a terminal environment. It turned out to be very successful implementation.

So there's no reason to stay mired in the past. The key is to extend your current skill set, building upon what is valuable, but adding in where new ideas can make a tangible difference.

I walked in these shoes for a while, however I was a manager who always seemed to get the 'interesting' dead end jobs. I got out by becoming an IT auditor and now return to haunt my ex-colleagues.

How to do it? Easy, join your local ISACA chapter and become a CISA. Any person with twenty plus years of experience should find it a refreshing and challenging change. I know I did.

Another suggestion for -Cuffed.

Try talking with your current client. You are a contractor, offer some other value that you can provide. Bring in another associate to do the COBOL programming, and offer your premium skills to handle real business problems. This may give you an opportunity to show off other skills whether they be Java programming, .NET architecture skills, or just genius decision making skills. Come in as someone who can offer more value to the business than you currently provide. Shun the tasks that you don't want to another associate. This other associate could be someone who works for you. Or it could be that you simply suggest a colleague to your client to take over your contractor position if they can hire you full time for another job opening.